Hals Blog

Thursday, November 13, 2014

It's been a while since my last blog and although I may write about "why" that is, for now all you need to know is that I will be publishing less and having my partner and wife Claudia take over the blog. Claudia has been a broker since 1980 and is still the best broker I know. Her new blog will begin shortly and be a more traditional blog. She will be concentrating on local real estate news and community activities. Hopefully you will all enjoy her indites and observations.

Saturday, June 15, 2013

If you live in New York State you have a great opportunity to make your state both more informed as well as healthier. There are currently two bills in the New York State Legislature which would require all foods containing Genetically Modified Organisms (GMOs) to be labeled as such. In the Assembly the bill is listed as A03525 and in the Senate S03835-A. There is no downside to this labeling requirement and a lot of upside. While you may still be on the fence about GMOs, there is no doubt that foods containing GMOs should at least be labeled, giving you the option of purchasing or not purchasing these foods.

I wrote a post last year in support of a similar bill in California which was in the form of a state referendum. (That post can be found on my blog archive dated 11/30/13). While you would think that a progressive state like California should easily pass this referendum you would be wrong. To understand why you would need to see the list of chemical and food companies who spent over $37,000,000 to fight the proposition. (They include Monsanto, DuPont, Council for Biotechnology Information, Grocery Manufacturers Association, PepsiCo, Coca-Cola, Kraft Foods and the Kellogg Company.)

Here in the northeast there is a bit of a “game of chicken” going on. Now is the time to tell your legislative representatives you want the New York State bill passed and this “game” to end. Many of our surrounding states are involved but don’t want to be the first to make this labeling mandatory. You’ll know how close it is to becoming a reality is by how much advertising you see on your TV. As of my writing this post I haven’t seen any. Connecticut was the first state to pass a similar bill earlier this week but with the caveat for implementation being 4 more northeast states must pass similar laws (including one that borders Connecticut) before it becomes mandatory. Other similar bills are being discussed in Massachusetts, where there are hearings this month, Vermont where a similar bill has been pass by a large majority in the houses with no caveat, like Connecticut, thus making it the most likely state to have this labeling requirement become law, although the state senate may not vote until early 2014.

To understand the battle you need look no further than the results in the other sixty-one countries around the world, including China and all of the European Union, that already require labeling of GMO foods. Ninety three countries in total have passed such labeling requirements. Where these labeling requirements exist, the public has made their preference know, that preference being choosing non-gmo products. Just how big is the issue? Seventy percent of all processed foods now have GMOs in them. Why? Just look at the seven largest crops that are now mainly GMO grow. They include (in order of volume) corn, soy, cottonseed, alfalfa, papaya, canola and sugar beets. (It’s not coincidental that the list includes most of the government subsidized crops.)

As far as the science goes both the Food and Drug Administration (FDA) and the American Medical Association have confirmed that there are no proven negative health consequences associated with consuming genetically modified organisms (GMOs). The real question is what rights do consumers have. Do you, as a consumer, have the right to know what is in your food? An example: 90 percent of all cereal foods include GMOs. As a devout Cheerios eater, I’m not likely to stop buying this food. But that’s not the point. The point is do I have the right to know.

As I write this post one of the big stories of the week is the disclosure about the data the government is keeping on our cell calls, emails and other communications we thought were private. Just a few years ago this story would be gigantic. Instead, most americans failed to get “outraged.” It turns out that most of us are willing to pay the price of losing some privacy in exchange for security. I believe the same is true about the labeling of GMOs. The food companies are afraid that the public will react poorly to finding out what most of us know already, that much of our food has GMOs in it. Some of us in fact may change their food purchasing habits, but most won’t and while we may give up certain rights, the right to know is not one of them. Take some time to let your legislators know this is a right you want to hold on to.

Tuesday, June 11, 2013

As a small business owner I am used to getting threatening letters from the New York State Department of Finance and Taxation. They usually are bills for a form that was not filed with the department. I generally call my accountant and it always turns out that either I did not have to file that form or had filled it and they were incorrect. The bills usually break down into a filing fee of a few hundred dollars and a penalty of a few thousand dollars. It's always an inconvenience but you get used to it and it is always easy to clear up.

A few weeks ago I got a very different letter. This time is was personal, to my wife and I and was a notice of a limited audit of my 2010 tax return. Specifically it related to a tax credit I took for the purchase and installation of a 4.3k photovoltaic array. When I got the letter I was surprised, first because I was sure I had the system installed before 2010 and the second reason was that I had never been personally audited before. (To add to the issue, after calling my accountant I confirmed that the system was actually installed in 2009, which was more than 3 years after filing, making the audit illegal. As it turned out, had I been wealthy and had a NYS tax due of over $5000 it would have been too late to audit me but because my NYS tax due for 2009 was less then $5000, I carried over the tax credit through 2010, making it legal).

I was very concerned for a number of reasons. The first was that when I had my system installed I used a local contractor who wanted to do business with me and gave me a ridiculous price, thousands lower than the next bid. The second concern was that I live in a location in upstate New York where we had two major rainstorms in the past few years and my basement had been flooded. That was where my records were kept.

I panicked. What to do? They had only given me 30 days or they threatened to expand the audit. I had a conversation with my wife and she gave me a suggestion that I didn't expect. "Call your legislative representatives," she suggested. I thought there was no downside to taking her suggestion so I wrote a letter to each of my representatives. (In my case Senator Cecilia Tkaczyk and Assemblyman Peter Lopez). I expected nothing.

Within 2 days I got a call from both their offices and two days after that I received a call from a very pleasant tax investigator for the NYS Department of Taxation. He informed me that they received my letter asking for an extension of time and that it had been granted and that a letter stating so had been sent to me. (As of this post I had still not recieved that extension letter). In addition, he told me about the calls he got from my representatives and wanted to help. We had a very pleasant conversation and he suggested I made an attempt at finding any proof of what the system cost using bills or cancelled check.

I told him that I would try, but asked what the state was doing as these to storms had caused literally millions of dollars of damage and I couldn’t be the only person with damaged papers. (There were two towns that were totally destroyed in one storm). The next day I went down into my basement and found a bill and cancelled check from the company I purchased the equipment from but this represented only $18,000 of the $22,500 credit I took. The balance of my papers were too destroyed to be of any purpose and the account the remaining checks were paid out of had been closed so there was no banking access.

I decided to call back the NYS Dept. of Finance investigator anyway to send him what I had found. He had me fax him the bill and check I had and he called me back later that day to inform me that what I had sent would be all that he needed to “resolve” the case.

I believe that this was not normal procedure and that the calls from my legislative representatives had assisted in making my case a bit easier to resolve. While I had never contacted any of my representatives before this incident, I would not hesitate to do it again. We always think our politicians don’t really have much to do with the ordinary citizen but I’m proof that this is not the case. This is part of what they do when they go back to their districts. They are there for us. Use them.

Thursday, May 23, 2013

Later this week I hope to lay out a primer for Mutual Funds, having just gotten off the phone with a Financial Advisor, trying to sell me a Managed Bond Fund, but I have to put that post off. Having a conversation with a salesman trying to sell me funds always pisses me off. They’ve got their rap down and it’s always a challenge to Stop, and Think about what they are saying. They always have the right answer. Despite the FACT that there is no data showing that managed funds have any advantage over simple index funds in the long run (over 15 years) they keep the pitch up. I don’t want to insult my audience but I know statistically that most people own funds that they have no idea:

1. What the funds goals are?

2. What the management fees are?

3. What the turnover is?

4. What the price or quality of the funds holdings?

These are some basic questions and most people can’t answer them. While they are all important, the most important may be question # 2. What are the management fees. Today the average fee is 1.5%. Here is how I’m going to save you $10,000 and you don’t need to know the answer to any of the other questions. I’m going to assume that you are into a lot of different funds (your advisor gave you the safety in diversification rap) and here too you don’t need to know any of the answers to any of the questions, just know that if you have a portfolio of $100,000 and are paying a 1.5% expense ratio, you will have paid $11,681 in fees in 10 years. (If you really want to get sick, try calculating the compounded interest fees for as many years as you plan on saving before you retire.)

Now here’s my plan. SELL IT ALL FROM THE MANAGED ACCOUNTS AND REPURCHASE the same stuff from an Index Fund like Vanguard. While in my opinion Vanguard is the best, most companies have gone into Index funds so if you have an account at Schwab, buy from Schwab if you want, but KNOW THAT THE FEES WILL BE MORE LIKE .1%-.5%. Now run the same compounded interest calculations and guess what, that same $100,000 at even .5% will have only cost $5,127 (or a savings of $6,554 over the 10 year timeframe). If you can find funds with a .1% fee, the cost will just be $1,005, a savings of $10,613 (which is the $10,000 I promised). The beauty of this is you are investing in the same bucket of stocks, just not giving away the fees.

If you ran this out over a much longer time, say 35 years, the amount of money you have paid in fees could represent more than a third of what you made on your investments. Additionally, now most companies have created Index funds that are as diversified as any managed fund. Need growth stocks, there is a fund for that. Looking for value, there’s fund for that. REMEMBER, although the salespersons tell you that a managed fund does better, and it might in the short term, IN THE LONG TERM THERE IS NO PROOF THAT A MANAGED ACCOUNT DOES ANY BETTER THAN AN INDEX FUND. Hey, it’s your money, your call.

Wednesday, May 15, 2013

I don't know who originated the saying, but whenever I think of Warren Buffett I think of "Be fearful when others are greedy and greedy when others are fearful." If ever there was an overabundance of greed, it's now. While the Dow is at consistent all time highs each day (today it closed at 15,215) and the Fed is touting stocks as "cheap", I can't stop thinking a correction is due. And that correction is likely to be big. The Fed did add a large disclaimer but I'm serious when I say while there are great signs the recovery is starting to look less anemic, the unemployment rate and addition of less than 200,000 new jobs a month still leads me to believe that we're on the wrong track.

The Democrats are in a defensive stance so no new jobs legislation is on the burner and with Obama looking weaker than usual nothing is likely to happen through the next election. In fact with the poor way the administration is handling BengaziGate and IRSgate things are likely to get worse before they get better. Could the Republicans actually get more house seats in the fall? Either way, nothing of substance is likely to happen through November and with the thieves on Wall Street needing to make some big money, selling short will need to happen. More for them, less for you.

I've gone out on the line but since I leave my posts online indefinitely we'll know shortly so here's the prediction:

1. The "correction" will happen before the end of June.

2. It will be over 1000 points.

3. The Dow will end the year below 14,000 before it begins to rise again in January.

Monday, May 13, 2013

One of the common questions asked of me is "What do I grow" in my garden? There's no simple answer because I don't grow the same crops every year, but I do have "core" crops that I always grow: lettuce, tomatoes, cucumbers, carrots, onions,garlic, potatoesand squash. If you look at this list you will see that with the exception of lettuce and onions, most of these crops are "expensive" to purchase, especially if you are purchasing the organic varieties. This may be one key to setting up your garden. If you can buy organic varieties at a reasonable price, why grow it? The best reason might be the special "taste" of fresh picked crops. There is no question that going to your garden and picking any vegetable will taste better than anything you can buy in a store.

Because of this taste difference, I grow some crops like carrots and garlic Every time I put out carrots for my guests they comment on "just how great they taste." "That's how a carrot should taste" is one of the most common comments at my dinner table all summer long. I hear the same for my string beans and tomatoes as well. Most store bought fruits and vegetables just can't match the flavor of fresh picked. If you only eat organic fruits and vegetables it's a tough question as to which is more important, price or taste. Most of the time choosing crops that are both better tasting and expensive as well is a good way to choose. Cucumbers fall into both categories, they are both better tasting and very expensive to purchase in a store. Evan non-organic are between a dollar and a dollar and a half for each cucumber and a summer salad with a cucumber is just not a salad.

Also expensive and good tasting are tomatoes I could spend a whole post talking about tomatoes alone. I grow at least 4 varieties, from small grape strains to great eating tomatoes and a few for types for my famous tomato sauces. Unlike most sauce makers, I don't grow or use plum tomatoes. I like sweet or sweet/hot sauce and mostly use midsize tomatoes that I could either just slice and eat or make sauce with. Most are heirloom varieties but some of the new hybrids are too tempting to not try. I like to switch and try at least one new variety a year.

Not all choices have to be expensive store bought crops. One of my favorite inexpensive core crops is lettuce. I grow at least 6 types of lettuce and an equal amount of Japanese Greens. Nothing is better to start a meal then a mixed salad. The Japanese Greens adds a multitude of additional flavors, from nutty to zippy. Depending upon the main course, I might add a little Arugula (which I also grow) to the mix. (Johnny's Seeds, which is where most of these links go sells Arugula in "seed disks" which make it very easy to plant).

In addition to my core crops I add broccoli and brussel sprouts most years. Both can be harvested late in the summer and fall. For early crops I add peas and string beans. Last year besides my usual squash, I tried an italian variety trombone zucchini, which now have become a standard annual crop.

A few red flags should be discussed. If you are not growing from seed (which is the best way to go), never buy from a discount source. Never buy from Walmart, Lowes, Home Depot or any of the other discount outlets that go into the gardening business 3 months of the year. They don't take care of their plants and sell deceased uncared for plants. Plants from these sources can have everything from funguses to bug infestations. Purchase only from all year suppliers and only the best possible stock. Lastly, try at least a few "never planted before" crops each year. This year besides planting potatoes, I planted Jerusalem Artichoke, a potato like crop. I also try and increase my fruit varieties, this year planting 4 more dwarf apple trees, 2 new varieties of strawberries, 2 new blueberry bushes and 1 new grape. It's not too late to plant, so go ahead a have a great planting season. You'll be a happy camper this fall.

Friday, May 10, 2013

It has been weeks since the last rains here in upstate New York. It looks like it's going to be a long hot summer with little rain to speak of. Even if you get the rain you need where you live, now is the time to switch to drip irrigation for your gardens. I have been adding 100-200 feet of new drip irrigation to my garden each year, making watering less and less of a chore. While the lack of rain is one good reason to make the switch, some other good reasons include a.) the plants like it, b.) it saves 80% of our most precious natural resource (water), and c.) it's the right thing to do. If money is an issue, know that the price of drip hoses have dropped significantly. You don't have to but professional, using 5/8th inch hoses, 1/2" will do and with connectors and regulators you can have a professional setup for about $.10- $.12 a foot.

Add a water timer and meter and you can simply turn a dial and you will be set for the day.

If you have a large garden like I do you might need a multi-hose connection. If you use quick connects on all your attachments you can quickly move the water timer to each leg of your garden.

The combination of all these tools will make you a very environmentally friendly gardener. It will free up a lot of time and will save all of us a lot of water. Your plants will love it, your garden will love it and the world will love it. For those of you who get a lot of pleasure hand watering (and I'm included), you can still hand water certain parts or certain plants to get that enjoyment. I have 4 raised beds I still stand over of hand water and suck up the love. Have a great summer.